HSBC - "The UK has lost its AAA rating for the first time in its history, following the one notch downgrade by Moody's overnight. The implications for GBP are negative, the more pronounced impact likely to be evident when Asian markets reopen on Monday. We have previously highlighted the downgrade danger as one of the factors behind our bearish stance on GBP. We retain our 2013 year-end forecasts of 1.48 on GBP-USD and 0.91 on EUR-GBP.
(...) We started the year as one of the most bearish forecasters on GBP, and while this downgrade is not unexpected, it will remind markets of the challenges GBP faces in 2013, when it is becoming clear that its frailties are being exposed. In addition, while GBP has already fallen this year, the drop has been small when framed in the context of a longer time-frame, so further falls would not represent an overshoot. In fact, the downgrade story is likely to feed the negative GBP momentum in evidence ahead of this announcement."